Electricity sellers: Home customers increasingly preferring fixed price
Despite steadily growing prices, June and July say 8,000 households opt for Eesti Energia's fixed-price energy packages.
Record prices on the Nord Pool exchange have sent private customers looking at fixed-rate electricity contracts. Nearly 8,000 customers of national energy giant Eesti Energia (EE) opted for such a contract in June and July, Dajana Tiitsaar, head of the Estonian market for EE, told ERR.
Electricity seller Alexela has also noticed increased interest in fixed packages. "People have taken more of an interest in fixed-rate packages in recent months. The trend is a 15 percent increase in those who opt for such contracts. While customers are also interested in the [state's] universal electricity service, they want to know more before committing," Alexela board member Tarmo Kärsna said.
Eesti Energia's cheapest fixed contract bundle (Kindel Pluss) charges 20.6 cents per kilowatt-hour VAT included. The last seven days' average market price was 41.7 cents/kWh with VAT," Tiitsaar pointed out.
"Fixed-price contracts are entered into for a specific term, ranging from six months to five years. The longer the contract term, the cheaper the price of electricity," she added.
Eesti Energia started offering the renewables-based Kindel Pluss package this March. Since then, the price has been going up, from 14.4 c/kWh in spring to 17.2 c/kWh in June. Another 3.4 cents have been added to the price by today. "Sellers buy power from the open market. A markup is then added to the price to cover the seller's risks and operating expenses. Price advance has affected all sellers and hiked prices we can offer customers," Tiitsaar said.
Alexela offers a range of fixed packages with different terms. "Most customers go for the 12-month contract, while it is also possible to opt for packages of three, five and seven years," Kärsna said. Alexela did not agree to reveal the prices of different solutions (which can be seen by visiting its website - ed.). "Fixed prices are based on market futures, considering the customer's projected consumption. Any fluctuation in the prices of futures will also manifest in the price for the customer."
Eesti Energia made a net profit of €33 million in the second quarter, almost tripling its result from last year. Sales revenue was up 75 percent. The turnover of motor fuels, gas and electricity seller Alexela grew by nearly 50 percent to €368 million last year.
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Editor: Marcus Turovski